EconPapers    
Economics at your fingertips  
 

The impact of economic freedom on foreign portfolio investments: The case of the Caricom single market and economy

Tricia Mangal and Day-Yang Liu
Additional contact information
Tricia Mangal: Graduate Institute of Finance, National Taiwan University of Science and Technology, Taipei, Taiwan
Day-Yang Liu: Graduate Institute of Finance, National Taiwan University of Science and Technology, Taipei, Taiwan

International Journal of Research in Business and Social Science (2147-4478), 2020, vol. 9, issue 2, 213-222

Abstract: The present phenomena of globalization and market liberalization have attracted considerable attention from foreign investors. Several member states of the Caricom Single Market and Economy are becoming heavily dependent on foreign investments. Consequently, this study intends to investigate the effect of economic freedom on foreign portfolio investments in the case of the Caricom Single Market and Economy. For this purpose, this study has used data from 2012 to 2016. The results of the stationarity test showed that data of all variables considered in the study are stationary at level. Moreover, the fixed-effect model better modeled the data as suggested by the results of the Hausman test. Based on the results of the fixed effect models, economic freedom has a significant and positive effect on the total foreign portfolio investments. Therefore, an increase in economic freedom among the Caricom Single Market and Economy member countries will attract more investors to invest in their country stocks and debt instruments. Furthermore, for the robustness of the results, the study has also estimated a separate regression model for foreign debt portfolio investments and foreign equity portfolio investments which also support the baseline regression results and showed a significant and positive effect of economic freedom on both foreign debt and foreign equity portfolio investments. This study suggests that the member countries of the Caricom Single Market and Economy improve their economic freedom which will attract foreign investors to invest in their countries. Key Words:Economic freedom, Caricom Single Market and Economy, Foreign equity portfolio investment, foreign debt portfolio investments,

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.20525/ijrbs.v9i2.658 (application/pdf)
https://www.ssbfnet.com/ojs/index.php/ijrbs/article/view/658/547 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rbs:ijbrss:v:9:y:2020:i:2:p:213-222

Access Statistics for this article

International Journal of Research in Business and Social Science (2147-4478) is currently edited by Umit Hacioglu

More articles in International Journal of Research in Business and Social Science (2147-4478) from Center for the Strategic Studies in Business and Finance Istanbul Medipol University, School of Business. Contact information at EDIRC.
Bibliographic data for series maintained by Umit Hacioglu ().

 
Page updated 2020-05-09
Handle: RePEc:rbs:ijbrss:v:9:y:2020:i:2:p:213-222